Making Maternity Modern: Startups in the Pregnancy Space
Find out about the three main categories of startups in the pregnancy space - and which ones I find most promising
In a previous post I covered femtech to some extent. Some takeaways from there:
Due to the wastefulness of egg abandonment, we might see women undergoing more IVF cycles. They’ll need support in the form of communities like Robyn.
Mojo is a high-tech startup using computer vision to improve IVF efficacy.
Fertility testing kit provider Modern Fertility was a grand slam for Forerunner Ventures.
As taboos are eroded away with time, there’s potential to address key menopause issues with new products on the market.
And of course many more in the article itself. In this issue, we’ll cover fresh content within the femtech universe by digging into pregnancy, rather than fertility and feminine hygiene. I think these are weighty topics that people care deeply about, so companies solving such problems directly make for great investments.
In 2019, there were 3.7 million births in the United States. 3.7m new lives following months of pregnancy. There is nothing easy about pregnancy: sleep goes for a toss, vomiting in the first three months, fatigue. And yet, couples- and specifically women- endure these side effects for the promise of breathing new life into this world. People are willing to go to great lengths- and are willing to spend significantly- to ensure the health of their babies and the wellbeing of the mothers that deliver them.
I saw this firsthand as a consultant with the Morgan Stanley Children’s Hospital (MSCH). Dedicated physicians, obstetricians, and nurses tended to expecting mothers in the Antepartum unit and recent mothers in Postpartum. Pre-term infants (born before 37 weeks) in critical condition were sent to the neonatal intensive care unit (NICU) for special attention. Of the ten or so hospital departments, these three units - NICU, Antepartum, Postpartum - contributed maximally to excess length of stay. What does this mean? Hospitals basically benchmark to the average length of stay in the hospital nationwide for various diagnoses, then look at their own case load and gauge their variance from that mean. MSCH was well above the national mean because in urban areas, caregivers are committed to going the extra mile for these pregnant and postpartum mothers- but it costs the hospital a lot of overhead. One of our goals in Finance and Strategy was figuring out how to reduce excess length of stay and thereby improve patient throughput.
Startups in the pregnancy space that can link their value proposition with this aim of improving care efficiency are well placed in attracting provider clients. Astarte Medical is a good example. The precision nutrition company sells its NICUtrition software to provider groups that are looking to gain insights around preterm infant feeding protocols and patient outcomes. The software plugs into the hospital EMR and pulls feeding information from the EMR before presenting a compelling feeding schedule for the infant. By characterizing the infant’s gut microbiome and presenting an evidence-based feeding regimen, Astarte makes it easier to pin the infant’s length of stay to a calendar. Creating this business case and proving out the ROI will be important to gaining traction with providers.
Another strong app catering to hospitals and health plans is Babyscripts - which makes it easy for physicians to communicate with their patient-mothers before pregnancy and up to 1 year after pregnancy. It is a HIPAA-compliant forum for these exchanges. It offers certain modules like myMentalHealth and remote blood pressure monitoring. To be candid, I don’t think these add-ons are that exclusive; there are many BPM tools on the market and mental health apps largely amount to asking ‘how are you doing?’ and sending the mood results to a physician. But what Babyscripts DID do right is ingratiating itself within the flow of doctor-patient communication and keeping the dialogue going even after treatment. This is exactly what the smaller player Totally Pregnant is trying to do, but they face an uphill road: Babyscripts raised $6m in 2019 to expand into new markets.
These are examples in the B2B space - startups selling to hospital clients and plans. There’s a larger femtech universe out there, and most startups are focused on selling to the consumer - the mother - rather than hospitals. This market is projected to grow past $50Bn by 2027. There are a few strong market maps breaking down the universe of femtech startups. If you’re interested in this space, I recommend these two in particular: CBInsights and Forbes. I’ve pasted the CBInsights one below.
Within the map above, the focus of this article falls under Pregnancy and Nursing Care. For our purposes, I’m focused on pregnancy startups that directly aid in improving the newborn’s or mother’s health and well-being, as opposed to other startups lifting up the “new mom economy” such as baby food delivery startups like Yumi and baby clothing startups like NEA-backed Maisonette. Those angles are important but it’s painting too broad a brush to consider them in the same breath as Astarte Medical.
Key Segments of Pregnancy Startups
There are three main categories of startups within my pregnancy segment, summarized below:
Breastfeeding device startups: Manufacturers of breast pumps such as Willow and Freemie sell portable sleek pumps (without a bundle of tubes coming out of the pumps) that give mothers the ability to generate milk while they’re out at work or doing yoga. The milk is collected in proprietary spill proof milk bags (in older models, these bags leak with too much movement). These solutions directly improve the health of newborn babies who drink the collected breast milk, and they bring convenience to maternity.
Pregnancy monitoring devices and wearables: These startups include Bloomlife and PregnanTech. They can be further divided into two categories: (i) data collection startups that relay rarely actionable information back to the consumer, and (ii) wearable startups that more directly influence the course of pregnancy. Bloomlife falls under the former category and PregnanTech the latter. I’d say Pregnantech is a better target for VC fundraising.
Startups targeting prevalent maternal complications through prenatal education: The most common prenatal complications that expecting mothers face are gestational hypertension, diabetes, and pre eclampsia. Pregnancy related deaths are also particularly high in the U.S., as a result of complications. In many cases, proper prenatal screening can make all the difference. There are startups that equip mothers with the information they need to consult with their physicians and midwives knowledgeably before it’s too late. In my opinion, these hold the most promise. Another huge issue: PCOS. Startups like UVI Health in India are targeting these issues.
Merits and Risks of Pregnancy Startups
Let’s discuss each of these B2C startups in sequence.
Breast pump manufacturers: The key issue with these pumps? They sell for ~$500 - 10x the cost of low-end electric double breast pumps which also don’t require cords. If gross margins on these devices are high, manufacturers would do well to bring the prices down. High prices constrict the addressable market. Can’t say I’m bullish here.
Monitoring Devices: These startups need to provide bang for buck, which is a difficult value proposition - it requires being able to provide actionable, diagnostic information and many do not have the HIPAA clearance to do so. Bloomlife provides a strap on belt that gauges contractions in the third trimester - there are Braxton Hicks contractions which are qualitatively different from labor contractions and Bloomlife believes it can hazard a guess at which one a woman is going through, and record this contraction data over time. The value of this historical information? Unclear. This seems more like a research study than a startup. The price is also exorbitant - starting at $149 the first month. Without any diagnostic information and a pricey monthly subscription, users roll off in less than eight weeks.
Prenatal education startups: Based off her own experience, Bonnie Roupe founded information app Bonzun in 2012 in Stockholm, and the product’s focus has been informing pregnant mothers about conditions that they may be going through. Roupe herself had pre eclampsia which was what prompted the genesis of Bonzun. These are issues that affect women around the world, so she has also launched Kexuema in China (which has the same function). Growth has stalled significantly with Bonzun though (at least publicly); a more fast growth app in the same space is amma pregnancy tracker, which is similarly an informational tool. The company is fresh off a Pre-Series A round and saw ARR jump from $300k to $3m in the most recent year. The reason these apps help is that expecting mothers can reach out to their doctor before it’s too late in the case of a serious condition they don’t fully understand.
Final Thoughts
One of the toughest challenges with building a pregnancy app or startup is candidly the addressable market size. We are focused on an important but limited sliver of the public when it comes to building a recurring user population. On the other hand, a “super-app” has its eyes set on capturing this user base even before pregnancy (which I think Bonzun tries to do), provides vital information and community during pregnancy (like Robyn), and presents nutritional information and baby food delivery to mothers (though we said we wouldn’t broach the space, it’s still a good example of value delivery past the point of pregnancy). Strong startups in this space will make up for the smaller market size by delivering value throughout customer lifetime.
Thanks to Naaman Mehta, Ob-Gyn M.D. for her contributions around the importance of prenatal education.